BDS market development guide.pdf - PACA

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18 Figure 6: Quadrant of Demand-side Conditions Recognition of a need for a solution high low WEAK DEMAND NO DEMAND EFFECTIVE DEMAND WEAK DEMAND low high Willingness to pay for a solution KEY CHARACTERISTICS OF EFFECTIVE SUPPLY We choose two factors to define effective supply: the ability to present an attractive offer (such as products) that SMEs want and the technical know-how to solve problems. Like the demand side of the market equation, these factors must be present and they are likely to evolve along separate paths. Specifically, one could imagine a situation where a BDS supplier is very good at packaging an attractive offer—convincing the consumer to purchase a service—but is unable to deliver a solution to the SME’s problem. The supplier may be effective at marketing a training product, for example, but is unable to deliver a business solution as advertised. The converse is also true when a supplier has the technical know-how to solve the problem (it has skills, a track record), but it lacks the ability to package an attractive offer, perhaps because it lacks marketing skills or because of more fundamental structural problems like cost base or location (see Box 3). Suppliers may begin to sell their service below costs, or may not be able to develop repeat clients because the client did not perceive the benefit to be worth the cost even though the problem was actually solved. Both of these factors—an attractive offer consumers want and the technical know-how to deliver—must be present to develop effective supply over time. When service providers have both the offer and the technical know-how, supply is effective. If, in contrast, a service provider has the technical know-how but lacks the ability to package and present attractive offers, supply is weak. The converse also describes weak supply— suppliers are good at marketing but are unable to solve problems with their products. (In reality, a combination of both scenarios often lies behind supply-side weakness.) Nonexistent supply results from service providers lacking both appropriate skills and the ability to make an attractive offer to SMEs. Microenterprise Best Practices Development Alternatives, Inc.
19 Figure 7: Quadrant of Supply-side Conditions Technical know how to solve SME problems high low WEAK SUPPLY NO SUPPLY EFFECTIVE SUPPLY WEAK SUPPLY low high Ability to present an offer consumers want The objective of analyzing demand and supply is to identify specific constraints to the availability of effective BDS for SMEs, which can then be the basis for designing an intervention. Table 1 considers the implications of various demand- and supply-side characteristics on intervention rationale. Separate analysis of BDS demand and supply generates an understanding of the overall market dynamics and level of development of a given market situation. DETERMINING BOUNDARIES AND LEVEL OF EFFORT IN ANALYZING A MARKET Market Boundaries This generic picture of a market needs to get more specific when conducting an analysis. An important first step is to identify the boundaries of a market analysis. This will determine the nature of analysis and its outcome. For example, if the market is defined narrowly (for example, small business users of public calling offices), analysis can be much more specific and detailed. It will probably be more manageable too. In contrast, a broader market definition (all BDS consumption nationwide by all enterprises) will generally yield only an overview-level of analysis. Market parameters are frequently pre-determined by governments or donors and include: • Geography—such as a neighborhood, postal area, town, province, and country; • Products—such as consumers of specific types of service such as telecommunications or newspaper advertising; Chapter Two—Where We Are Now—A Framework for Market Assessment and Intervention Choice
Page 1 and 2: BDS Market Development: A Guide for
Page 3: Alan Gibson is a co-founder of The
Page 6 and 7: ii CHAPTER FOUR HOW DO WE GET THERE
Page 8 and 9: iv Table 1 Implications of Differen
Page 10 and 11: vi How to Use This Guide: A Quick R
Page 12 and 13: 2 • To address poverty, governmen
Page 14 and 15: 4 • Potentially, a range of provi
Page 16 and 17: 6 Figure 2: Flows of Services in th
Page 18 and 19: 8 • Efficiency—The cost bases o
Page 20 and 21: 10 • Advocacy: for the business c
Page 23 and 24: 13 CHAPTER TWO WHERE WE ARE NOW—A
Page 25 and 26: 15 The flow diagram of an effective
Page 27: 17 KEY CHARACTERISTICS OF EFFECTIVE
Page 31 and 32: 21 • Consumers—such as female-o
Page 33 and 34: 23 WHERE SHOULD INTERVENTIONS FOCUS
Page 35 and 36: 25 Figure 10: Matching Market Analy
Page 37 and 38: 27 CHAPTER THREE WHERE DO WE WANT T
Page 39 and 40: 29 Markets are institutions. Develo
Page 41 and 42: 31 What Needs to Be Done?—Key Sup
Page 43 and 44: 33 Box 7: Key Considerations in Ass
Page 45 and 46: 35 Figure 12: Functions of the Stat
Page 47 and 48: 37 Table 2: Sustainability Framewor
Page 49 and 50: 39 CHAPTER FOUR HOW DO WE GET THERE
Page 51 and 52: 41 Figure 13: Where to Intervene to
Page 53 and 54: 43 • Consistent Policies and Appr
Page 55 and 56: 45 • Have been developed to be pe
Page 57 and 58: 47 Avoiding overloading may involve
Page 59 and 60: 49 C For new product development, a
Page 61 and 62: 51 • Precisely, what are they goi
Page 63 and 64: 53 Existing MARKET (sub-sector, ent
Page 65 and 66: 55 To Reach Female-Owned Businesses
Page 67 and 68: 57 C Informal, and C Individuals. T
Page 69 and 70: 59 The drawbacks of tender-based se
Page 71 and 72: 61 CHAPTER FIVE HOW DO WE ASSESS OU
Page 73 and 74: 63 • How well?—the quality dime
Page 75 and 76: 65 day income * This highlights key
Page 77 and 78: 67 Beyond SMEs—Unchanged Indicato
Page 79 and 80:
69 Figure 16: Measurement Methods i
Page 81 and 82:
71 • Donors may be interested in
Page 83 and 84:
73 and poverty reduction? Or is the
Page 86 and 87:
A-3 KEY REFERENCES Anderson, Gavin,
Page 88 and 89:
A-5 Hitchins, R and Gibson, A; "The
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